Soak raw cashews overnight. (For quick softening, you can also simply bring them to boil, pull them off of the stove, and let them simmer and soak for one hour)
Add the cashews into your blender with the hot water, nutritional yeast, garlic, flour, vinegar, salt, pepper, and liquid smoke, and blend until very smooth.
Taste test and add more salt, pepper, or liquid smoke until your desired flavor is reached.
Pour smooth cheesy sauce (it should still be pretty thin) into a medium pot and stir frequently on medium heat until mixture is thick, gooey, and hot.
Serve immediately with bread bites, soft pretzels, or your favorite crackers!
Store leftovers in fridge for no more than 3-4 days. To reheat, simply pour it back into a pot on medium heat until the sauce is hot again.